Data Tools Shaping the Future of Procurement
In just 5 years, there will be 5,200 GB of data for every person on Earth. To put this into perspective, think about all the grains of sand on all the beaches on Earth, now multiply that by 57. By 2020, the majority of this data won’t be produced by humans, but by machines as they talk to each other over data networks. Let’s think about our smart phones. Today we are constantly taking pictures. Are you thinking about the 5 selfies you took on snap chat this morning, or the picture of your dinner last night that you snapped just for fun? Before smart phones, we didn’t take these pictures because it took too much time and effort to develop them and there was nowhere to store them. But today, we snap these pictures because we know we can store them or just simply delete them at the touch of a button. That being said, about 90% of all the data created is eventually abandoned.
This is how Michael Martine, CIO of Supply Chain Transformation at IBM, led his discussion on the webinar entitled Technology and the Future of Procurement, held on July, 9th. Martine went on to explain there is a new era in supply chain where there is an increased network orchestration and data is driven digitally around the world. How then are we able to manage this data and analyze it? As you can see, the procurement challenge in deriving all the necessary insights from all the disparate internal and external data sources is intensively manual and time consuming.
However, today with new data tools, “On Demand” has become “Before I even ask.” The data and analytics to solve a problem are essentially becoming available for use before a problem even arises. This sourcing and exploiting of IT is driving innovation and greater value. When processed and manipulated correctly, combined with predictive analytics, data can provide strategic insight to help drive cost savings and support overall spend management.
As Joe Payne, VP of Source One’s Professional Services explains in his blog, in the past, procurement departments large and small have undergone a variety of transformation projects, such as implementing supplier relationship management programs, developing category management teams, etc. While these steps are critical to obtaining savings, Payne explains: “they don’t allow us to predict costs.” The game-changer? – Data. Access to the right data can transform the way procurement departments’ function by making it possible to anticipate price changes and automating business decisions, saving time, man power, and money.
Payne also explains that although major industries such as healthcare and marketing are already taking advantage of “big data,” procurement is still behind. To help get their procurement department up to speed, Source One hired Data Scientist James Patounas. Patounas has started his own blog series at Source One, titled Data Acquisition, where he shares his expertise into data science, how procurement departments can acquire and leverage data to automate business processes and explains the different coding methods available that can be implemented to help guide future purchasing decisions.